With such mal-distribution of wealth around the world and so many individuals starving and/or living in squalor while others live in opulence beyond imagination, one might concede that capitalism and the free market is all about one wins and one loses in any transaction. The free market, though, gets a bad rap because free markets do not exist. All markets in some way, shape, or form are controlled by government officials. Therefore, the resulting mal-distribution of income and wealth and that trade results in one winner and one loser in today’s world is actually caused by the controlled economy, not one of a free market.
Adam Smith was the notable Scottish pioneer economist/philosopher that built the foundation of free market economics, capitalism, and libertarianism when he wrote his treatise “An Inquiry into the Nature and Causes of the Wealth of Nations” in 1776. He explained why trade takes place and how real wealth is created.
Milton Friedman, Nobel Prize winning economist who died a year ago, continued that explanation where in a free market, one that is unhampered by any government control, both parties to the trade must gain in order for the trade to take place. As a result of real free trade, therefore, economic growth must take place because all parties to the trade gain. In other words, in the absence of government permits, regulation, and taxation, the true value of any good or service is determined by the parties involved.
Greed is a universal human trait. The world is run on greed. All individuals make decisions in their best self-interest, even if it is doing something for someone else from their heart. They do it because it makes them feel good which is satisfying their greed, if you will, for being happy. The point is free trade and capitalism is the best system that allows for the most individuals to be able to satisfy their greed and self-interest while at the same time encourages ethical behavior.
Trade must take place in order to maximize one’s economic lot in life. No one creates all of the wealth one possesses by himself. However, in order for trade to take place individuals must be free to choose with whom they trade and must be free to find the individuals with whom to trade.
Government permits, regulations, and taxes restrict the number of players that can bring goods and services to the market making it very difficult for many, especially those who do not have much wealth, to participate.
Greed and ethics go hand in hand because in order to obtain what one desires (greed), one must give up something in an honest manner to satisfy the needs of another (ethics). If one is not ethical in his trade, he will eventually lose any wealth he has by not being able to trade. This type of activity takes place best when government is not involved in the transaction.
When government is demanded to intervene in free trade, greed and ethics do not go away. Government officials are still human and act in accordance to their self-interest just like everyone else. As a result of government intervention into the lives of individuals, individual creativity gets diverted to lobbyist activity, using government force (laws) to get one’s way, and even bribery resulting in corruption where corruption did not exist before.
A free society, one where government is relegated to only enforcing contracts and restitution to victims by criminals and penalizing all criminal activity such as murder, rape, and theft, does not do away with criminal and unethical behavior nor eliminate greed. The free society utilizes greed to its best advantage and minimizes the amount of unethical behavior. One will find more individuals doing for others and more ethical behavior in those societies that allow for more liberty and less government interference in the lives of individuals.
To learn more about ethics and greed in the free society stop by the Kofa High School auditorium tomorrow night at 7 o’clock. The people for the USA and the Yuma Union High School District host Mr. James P. Owen, author and investment money manager, who will discuss ten principles to live by as written in his book, “Cowboy Ethics: What Wall Street can learn from the Code of the West.”
Also, December 4 at the Booth Machinery conference hall at 6:30 PM Dr. Earl Taylor, President of the National Center for Constitutional Studies, will discuss the applicability of the Constitution to many of today’s world situations.